Good job there wasnt a major banking crisis that required the state to double its national debt, else Peter’s analysis would be somewhat undermined….oh, wait..
anybody for the last of the green jerseys now, anyone….
The last three or four popular articles I have read by Peter Sutherland were so bland and predictable that they could have been written and voted in by a UN subcommittee. No substantive content but all the right things are said.
Still Gregory, a lot of very banal rubbish is being written on the negative side and distributed to wide acclaim. I agree with you that statements like the paragraph below (from the article) are not testable in the sense of scientific theories. But there is merit in some leaders telling the world that there is a lot of potential in Irish society in order to counteract the overly negative drivel that seeks to turn a financial crisis (which has happened and may get worse) into a societal collapse (which need not). There is a huge appetite for development of a recovery plan and a few articles by people like Sutherland pointing out the long term potential of the Irish economy cant hurt.
Brian – don’t discard your green jersey just yet. Anyone who says that a long protracted decline is inevitable in Ireland is just plainly wrong. It may happen but at least partly this will be due to the attitudes and expectations of people in Ireland. If people give up at this early stage and stop trying to innovate then of course it will happen. We need to think about how to make sure people get through this transition (whether its one year or ten years) without damaging the rest of their lives. This is more important than telling people that everything is doom.
“While I do not want to trivialise the difficulties that Ireland faces, its problems are acute in nature rather than chronic. Once Ireland overcomes this short-term panic – and I believe that last week’s budget, whatever its alleged deficiencies, was a vital step in this process – the basic strengths of the Irish economy remain formidable. If the Irish people continue to react constructively to the harsh measures necessary, Ireland will be in a very strong position to benefit from the eventual global recovery and its healthy demographic profile will greatly help in this.”
Peter Sutherland appears to be the only one who understands what is going on or who bothers to study the full range of economic statistics.
He’s correct on a number of points, which have largely been missed by others – in particular:
(a) the importance of the balance-of-payments deficit vis-a-vis the budget deficit – the latter has been deteriorating to massive publicity, while the former has been showing dramatic improvement – Ireland is not Greece, Portugal, Spain or even Iceland, because Ireland is now virtually in balance-of-payments surplus, while the others have balance-of-payments deficits ranging from 10pc to 30pc of GDP
(b) the wealth-producing sectors in Ireland are holding up remarkably well – in Jan and Feb, manufacturing output in Ireland was down y-o-y by less than 1 per cent – in the EU as a whole, it was down y-o-y by almost 20pc (In Germany and Sweden by almost 25pc) – there is a similar pattern for exports
(c) the short-term nature (which he hints at) of the benefits to the UK of their currency devaluation – certainly, devaluing your currency by 30pc does bring some benefits in the short-term, but at the cost of future inflation – consumer price inflation in the UK is now almost 5pc higher than in Ireland and may well reach 10pc by end 2009 – the British are inflating away the benefits of their currency devaluation
(d) Ireland’s demographic profile is far superior to all other EU countries, and means that Ireland will require a smaller tax-take as a percentage of GDP than other EU countries for decades ahead.
Sutherland is doing the job (i.e. trying to reassure markets concerning the medium-term and long-term prospects for the Irish economy) that Cowen and Lenihan should be doing. I assume the reason that these two don’t is that they are both solicitors and don’t understand economic statistics.
@John: “Sutherland is doing the job (i.e. trying to reassure markets concerning the medium-term and long-term prospects for the Irish economy) that Cowen and Lenihan should be doing. I assume the reason that these two don’t is that they are both solicitors and don’t understand economic statistics.”
6 replies on “Ireland in Comparative Perspective”
Good job there wasnt a major banking crisis that required the state to double its national debt, else Peter’s analysis would be somewhat undermined….oh, wait..
anybody for the last of the green jerseys now, anyone….
The last three or four popular articles I have read by Peter Sutherland were so bland and predictable that they could have been written and voted in by a UN subcommittee. No substantive content but all the right things are said.
Still Gregory, a lot of very banal rubbish is being written on the negative side and distributed to wide acclaim. I agree with you that statements like the paragraph below (from the article) are not testable in the sense of scientific theories. But there is merit in some leaders telling the world that there is a lot of potential in Irish society in order to counteract the overly negative drivel that seeks to turn a financial crisis (which has happened and may get worse) into a societal collapse (which need not). There is a huge appetite for development of a recovery plan and a few articles by people like Sutherland pointing out the long term potential of the Irish economy cant hurt.
Brian – don’t discard your green jersey just yet. Anyone who says that a long protracted decline is inevitable in Ireland is just plainly wrong. It may happen but at least partly this will be due to the attitudes and expectations of people in Ireland. If people give up at this early stage and stop trying to innovate then of course it will happen. We need to think about how to make sure people get through this transition (whether its one year or ten years) without damaging the rest of their lives. This is more important than telling people that everything is doom.
“While I do not want to trivialise the difficulties that Ireland faces, its problems are acute in nature rather than chronic. Once Ireland overcomes this short-term panic – and I believe that last week’s budget, whatever its alleged deficiencies, was a vital step in this process – the basic strengths of the Irish economy remain formidable. If the Irish people continue to react constructively to the harsh measures necessary, Ireland will be in a very strong position to benefit from the eventual global recovery and its healthy demographic profile will greatly help in this.”
Just in case anyone hasn’t seen it: Paul Krugman writes about Austria but mentions Ireland: http://krugman.blogs.nytimes.com/2009/04/15/austria/
Peter Sutherland appears to be the only one who understands what is going on or who bothers to study the full range of economic statistics.
He’s correct on a number of points, which have largely been missed by others – in particular:
(a) the importance of the balance-of-payments deficit vis-a-vis the budget deficit – the latter has been deteriorating to massive publicity, while the former has been showing dramatic improvement – Ireland is not Greece, Portugal, Spain or even Iceland, because Ireland is now virtually in balance-of-payments surplus, while the others have balance-of-payments deficits ranging from 10pc to 30pc of GDP
(b) the wealth-producing sectors in Ireland are holding up remarkably well – in Jan and Feb, manufacturing output in Ireland was down y-o-y by less than 1 per cent – in the EU as a whole, it was down y-o-y by almost 20pc (In Germany and Sweden by almost 25pc) – there is a similar pattern for exports
(c) the short-term nature (which he hints at) of the benefits to the UK of their currency devaluation – certainly, devaluing your currency by 30pc does bring some benefits in the short-term, but at the cost of future inflation – consumer price inflation in the UK is now almost 5pc higher than in Ireland and may well reach 10pc by end 2009 – the British are inflating away the benefits of their currency devaluation
(d) Ireland’s demographic profile is far superior to all other EU countries, and means that Ireland will require a smaller tax-take as a percentage of GDP than other EU countries for decades ahead.
Sutherland is doing the job (i.e. trying to reassure markets concerning the medium-term and long-term prospects for the Irish economy) that Cowen and Lenihan should be doing. I assume the reason that these two don’t is that they are both solicitors and don’t understand economic statistics.
@John: “Sutherland is doing the job (i.e. trying to reassure markets concerning the medium-term and long-term prospects for the Irish economy) that Cowen and Lenihan should be doing. I assume the reason that these two don’t is that they are both solicitors and don’t understand economic statistics.”
Whereas a barrister (like Sutherland) does?
bjg